A digital bank is a bank that uses digital technology to offer its services and reach to its customers. Those technologies include but not limited to web, mobile, social media and AI etc. Digital banking is different to traditional banking in the way that it operates digitally in absence of any physical presence and so, it means that customers are able to access a wider range of products and services through digital channels than they would be able to if they used a traditional bank offering services through branch banking and long awaiting service offering cycles.
While there is still a call for traditional banks in Pakistan, people are keen to have access to any form of banking they have when they need it. Therefore, digital banks are accessible through websites and apps where customers can manage their money, make payments, open accounts, apply for loans and take out other services or products that are on offer.
Digital banks will be able to make decisions instantly for example on any loan applications or account opening requests through the use of data analytics, AI algorithms, digital credits and user’s mobile usage profiles, mobile wallets etc. Digital banks will be more open to communicating with external parties including fintech firms hence removing the barriers of integration with the external parties to offer a complete financial ecosystem to its customer.
A digital bank removes the need to visit a branch (branchless banking) in person and ensures that people can bank when they need to. This provides customers with more control over how they bank and that is what the future holds for banking. Pakistan is on its way to introduce more customer centric products by a number of digital banks and we are expecting launch of digital banks within year 2018.